STATEMENT

of
COMMISSIONER ROBERT M. McDOWELL
FEDERAL COMMUNICATIONS COMMISSION

Before the
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
COMMITTEE ON ENERGY & COMMERCE
UNITED STATES HOUSE OF REPRESENTATIVES

February 16, 2011

 Thank you, Chairman Walden and Ranking Member Eshoo. It is an honor to appear

before you and your colleagues today.

The markets under the purview of the FCC are dynamic and ever-evolving. Both the

“core” and the “edge” of the Internet are growing at breakneck speeds – all to the benefit of

American consumers. For instance, the U.S. leads the world in 4G wireless deployment and

adoption. In addition, while only 2.6 million consumers in North America were mobile-only

Internet users in 2010, that number promises to be 55 million by 2015. Moreover, by 2016, over

50 percent of U.S. households will use wireless broadband as their only form of high-speed

Internet access. No wonder that we also are the global leader in the creation and use of mobile

apps.

In fact, the top 300 free mobile applications in U.S. app stores enjoyed an average of

more than 300 million downloads per day last December. Global mobile app downloads will

more than double this year, reaching an estimated 17.7 billion downloads by year’s end. Last

year, Amazon’s digital book sales exceeded its sales of hardcover books. Last month, e-book

sales eclipsed paperbacks. And, smartphone sales have outpaced PCs for the first time.

Manufacturers shipped 101.9 million smartphones in the fourth quarter of 2010, compared with

92.1 million PC shipments.

On the other hand, in spite of these positive developments, last year, the private sector

invested around $44 billion in new broadband technologies, which is significantly lower than in

years past. I am hopeful that the FCC can work constructively to increase opportunities for

investment and job growth by bringing regulatory certainty to the broadband marketplace. With

Congress’s guidance, I look forward to adopting policies that put the power of more spectrum

into the hands of consumers, help accelerate broadband deployment and adoption, make our

2
Universal Service subsidy program more efficient, and modernize our media ownership rules,

among many other endeavors.

In addition, the FCC should also strive to remove regulatory underbrush that may have

outlived its usefulness and now only deters investment and innovation. Congress empowered the

Commission to do just that when it codified Section 10’s forbearance mandate more than 15

years ago. Streamlining our regulations could take significant burdens off the backs of

entrepreneurs and give them more freedom to invest and innovate. Such action could act as a

much-needed shot in the arm for America’s economy. President Obama said as much in his

recent Executive Order.

A little secret about the FCC: More than 90 percent of our votes are not only bipartisan,

but unanimous. I have enjoyed working with my colleagues on many recent initiatives including

continuation of our long-standing work on unlicensed use of the TV white spaces, simplifying

the process for the construction of cell towers, spectrum reallocation, and initiating the next step

in comprehensive universal service reform.

Obviously, we have had a few respectful disagreements as well, such as our differences

concerning the new regulations of Internet network management. For your convenience, I have

attached a copy of my dissent as Exhibit A. Nonetheless, I am confident that the five of us have

the ability and desire to continue to find common ground on an array of other issues that touch

the lives of every American every day.

Thank you, Mr. Chairman. I look forward to your questions.

3
 Exhibit A

Dissenting Statement of Commissioner Robert M. McDowell, Preserving the Open Internet, GN

Docket No. 09-191; Broadband Industry Practices, WC Docket No. 07-52; Report & Order, FCC
10-201 (rel. Dec. 23, 2010)

4
 STATEMENT OF COMMISSIONER
ROBERT M. McDOWELL

RE: Preserving the Open Internet, et al., Report and Order (Dec. 21, 2010)

Thank you, Mr. Chairman. And thank you for your solicitousness throughout this
proceeding. In the spirit of the holidays, with good will toward all, I will present a condensed
version of a more in-depth statement, the entirety of which I respectfully request be included in
this Report and Order.

At the outset, I would like to thank the selfless and tireless work of all of the career
public servants here at the Commission who have worked long hours on this project. Although I
strongly disagree with this Order, all of us should recognize and appreciate that you have spent
time away from your families as you have worked through weekends, the holidays of
Thanksgiving and Chanukah, as well as deep into the Christmas season. Such hours take their
toll on family life, and I thank you for the sacrifices made by you and your loved ones.

For those who might be tuning in to the FCC for the first time, please know that over 90
percent of our actions are not only bipartisan, but unanimous. I challenge anyone to find another
policy making body in Washington with a more consistent record of consensus. We agree that
the Internet is, and should remain, open and freedom enhancing. It is, and always has been so,
under existing law. Beyond that, we disagree. The contrasts between our perspectives could not
be sharper. My colleagues and I will deliver our statements and cast our votes. Then I am
confident that we will move on to other issues where we can find common ground once again. I
look forward to working on public policy that is more positive and constructive for American
economic growth and consumer choice.

William Shakespeare taught us in The Tempest, “What’s past is prologue.” That time-
tested axiom applies to today’s Commission action. In 2008, the FCC tried to reach beyond its
legal authority to regulate the Internet, and it was slapped back by an appellate court only eight
short months ago. Today, the Commission is choosing to ignore the recent past as it attempts the
same act. In so doing, the FCC is not only defying a court, but it is circumventing the will of a
large, bipartisan majority of Congress as well. More than 300 Members have warned the agency
against exceeding its legal authority. The FCC is not Congress. We cannot make laws.
Legislating is the sole domain of the directly elected representatives of the American people.
Yet the majority is determined to ignore the growing chorus of voices emanating from Capitol
Hill in what appears to some as an obsessive quest to regulate at all costs. Some are saying that,
instead of acting as a “cop on the beat,” the FCC looks more like a regulatory vigilante.
Moreover, the agency is further angering Congress by ignoring increasing calls for a cessation of
its actions and choosing, instead, to move ahead just as Members leave town. As a result, the
FCC has provocatively charted a collision course with the legislative branch.

Furthermore, on the night of Friday, December 10, just two business days before the
public would be prohibited by law from communicating further with us about this proceeding,
the Commission dumped nearly 2,000 pages of documents into the record. As if that weren’t
enough, the FCC unloaded an additional 1,000 pages into the record less than 24 hours before the

5
end of the public comment period. All of these extreme measures, defying the D.C. Circuit,
Congress, and undermining the public comment process, have been deployed to deliver on a
misguided campaign promise.

Not only is today the winter solstice, the darkest day of the year, but it marks one of the
darkest days in recent FCC history. I am disappointed in these “ends-justify-the-means” tactics
and the doubts they have created about this agency. The FCC is capable of better. Today is not
its finest hour.

Using these new rules as a weapon, politically favored companies will be able to pressure
three political appointees to regulate their rivals to gain competitive advantages. Litigation will
supplant innovation. Instead of investing in tomorrow’s technologies, precious capital will be
diverted to pay lawyers’ fees. The era of Internet regulatory arbitrage has dawned.

And to say that today’s rules don’t regulate the Internet is like saying that regulating
highway on-ramps, off-ramps, and its pavement doesn’t equate to regulating the highways
themselves.

What had been bottom-up, non-governmental, and grassroots based Internet governance
will become politicized. Today, the United States is abandoning the long-standing bipartisan and
international consensus to insulate the Internet from state meddling in favor of a preference for
top-down control by unelected political appointees, three of whom will decide what constitutes
“reasonable” behavior. Through its actions, the majority is inviting countries around the globe to
do the same thing. “Reasonable” is a subjective term. Not only is it perhaps the most litigated
word in American history, its definition varies radically from country to country. The precedent
has now been set for the Internet to be subjected to state interpretations of “reasonable” by
governments of all stripes. In fact, at the United Nations just last Wednesday, a renewed effort
by representatives from countries such as China and Saudi Arabia is calling for what one press
account says is, “an international body made up of Government representatives that would
attempt to create global standards for policing the internet.”1 By not just sanctioning, but
encouraging more state intrusion into the Internet’s affairs, the majority is fueling a global
Internet regulatory pandemic. Internet freedom will not be enhanced, it will suffer.

My dissent is based on four primary concerns:

1) Nothing is broken in the Internet access market that needs fixing;

2) The FCC does not have the legal authority to issue these rules;

3) The proposed rules are likely to cause irreparable harm; and

4) Existing law and Internet governance structures provide ample

consumer protection in the event a systemic market failure occurs.

1
John Hilvert, UN Mulls Internet Regulation Options, ITNEWS, Dec. 17, 2010,
http://www.itnews.com.au/News/242051,un-mulls-internet-regulation-options.aspx.

6
 Before I go further, however, I apologize if my statement does not address some
important issues raised by the Order, but we received the current draft at 11:42 p.m. last
night and my team is still combing through it.

I. Nothing Is Broken in the Internet Access Market That Needs Fixing.

All levels of the Internet supply chain are thriving due to robust competition and low
market entry barriers. The Internet has flourished because it was privatized in 1994. 2 Since
then, it has migrated further away from government control. Its success was the result of
bottom-up collaboration, not top-down regulation. No one needs permission to start a website or
navigate the Web freely. To suggest otherwise is nothing short of fear mongering.

Myriad suppliers of Internet related devices, applications, online services and

connectivity are driving productivity and job growth in our country. About eighty percent of
Americans own a personal computer. 3 Most are connected to the Internet. In the meantime, the
Internet is going mobile. By this time next year, consumers will see more smartphones in the
U.S. market than feature phones. 4 In addition to countless applications used on PCs, growth in
the number of mobile applications available to consumers has gone from nearly zero in 2007 to
half a million just three years later. 5 Mobile app downloads are growing at an annual rate of 92
percent, with an estimated 50 billion applications expected to be downloaded in 2012. 6

Fixed and mobile broadband Internet access is the fastest penetrating disruptive
technology in history. In 2003, only 15 percent of Americans had access to broadband. Just
seven years later, 95 percent do. 7 Eight announced national broadband providers are building
out facilities in addition to the construction work of scores more local and regional providers.
More competition is on the way as providers light up recently auctioned spectrum. Furthermore,
the Commission’s work to make unlicensed use of the television “white spaces” available to
consumers will create even more competition and consumer choice.

2
And at this juncture, I need to dispel a pervasive myth that broadband was once regulated like a phone company.
The FCC’s 2002 cable modem order did not move broadband from Title II. It formalized an effort to insulate
broadband from antiquated regulations, like those adopted today, that started under then-FCC Chairman Bill
Kennard. Furthermore, after the Supreme Court’s Brand X decision, all of the FCC votes to classify broadband
technologies as information services were bipartisan. A more thorough history is attached to this dissent as
“Attachment A”.
3
See Aaron Smith, Pew Internet & American Life Project, Americans and their gadgets (Oct. 14, 2010) at 2, 5, 9
(76 percent of Americans own either a desktop or laptop computer; 4 percent of Americans have “tablet
computers”).
4
Roger Entner, Nielsenwire, Smartphones to Overtake Feature Phones in U.S. by 2011 (Mar. 26, 2010).
5
See Distimo, GigaOm, Softpedia (links at: http://www.distimo.com/appstores/stores/index/country:226;
http://gigaom.com/2010/10/25/android-market-clears-100000-apps-milestone/; and
http://news.softpedia.com/news/4-000-Apps-in-Windows-Phone-Marketplace-171764.shtml).
6
See Chetan Sharma, Sizing Up the Global Mobile Apps Market (2010) at 3, 9.
7
Federal Communications Commission, Connecting America: The National Broadband Plan at 20 (rel. Mar. 16,
2010) (National Broadband Plan).

7
 In short, competition, investment, innovation, productivity, and job growth are healthy
and dynamic in the Internet sector thanks to bipartisan, deregulatory policies that have spanned
four decades. The Internet has blossomed under current law.

Policies that promote abundance and competition, rather than the rationing and
unintended consequences that come with regulation, are the best antidotes to the potential
anticompetitive behavior feared by the rules’ proponents. But don’t take my word for it. Every
time the government has examined the broadband market, its experts have concluded that no
evidence of concentrations or abuses of market power exists. The Federal Trade Commission
(FTC), one of the premier antitrust authorities in government, not only concluded that the
broadband market was competitive, but it also warned that regulators should be “wary” of
network management rules because of the unknown “net effects … on consumers.” 8 The FTC
rendered that unanimous and bipartisan conclusion in 2007. As I discussed earlier, the
broadband market has become only more competitive since then.

More recently, the Department of Justice’s Antitrust Division reached a similar

conclusion when it filed comments with us earlier this year. 9 While it sounded optimistic
regarding the prospects for broadband competition, it also warned against the temptation to
regulate “to avoid stifling the infrastructure investments needed to expand broadband access.” 10

Disturbingly, the Commission is taking its radical step today without conducting even a
rudimentary market analysis. Perhaps that is because a market study would not support the
Order’s predetermined conclusion.

II. The FCC Does Not Have the Legal Authority to Issue These Rules.

Time does not allow me to refute all of the legal arguments in the Order used to justify its
claim of authority to regulate the Internet. I have included a more thorough analysis in the
supplemental section of this statement, however. Nonetheless, I will touch on a few of the legal
arguments endorsed by the majority.

Overall, the Order is designed to circumvent the D.C. Circuit’s Comcast decision, 11 but
this new effort will fail in court as well. The Order makes a first-time claim that somehow,
through the deregulatory bent of Section 706, in 1996 Congress gave the Commission direct
authority to regulate the Internet. The Order admits that its rationale requires the Commission to
reverse its longstanding interpretation that this section conveys no additional authority beyond
what is already provided elsewhere in the Act. 12 This new conclusion, however, is suddenly
convenient for the majority while it grasps for a foundation for its predetermined outcome.
Instead of “remov[ing] barriers to infrastructure investment,” as Section 706 encourages, the

8
Federal Trade Commission, Internet Access Task Force, Broadband Connectivity Competition Policy FTC Staff
Report (rel. June 27, 2007) at 157.
9
See Ex Parte Submission of the U.S. Dept. of Justice, GN Docket No. 09-51 (dated Jan. 4, 2010).
10
Id. at 28.
11
Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010).
12
Order, ¶ 118.

8
Order fashions a legal fiction to construct additional barriers. This move is arbitrary and
capricious and is not supported by the evidence in the record or a change of law. 13 The
Commission’s gamesmanship with Section 706 throughout the year is reminiscent of what was
attempted with the contortions of the so-called “70/70 rule” three years ago. I objected to such
factual and legal manipulations then, and I object to them now.

Furthermore, the Order desperately scours the Act to find a tether to moor its alleged
Title I ancillary authority. As expected, the Order’s legal analysis ignores the fundamental
teaching of the Comcast case: Titles II, III, and VI of the Communications Act give the FCC the
power to regulate specific, recognized classes of electronic communications services, which
consist of common carriage telephony, broadcasting and other licensed wireless services, and
multichannel video programming services. 14 Despite the desires of some, Congress has not
established a new title of the Act to police Internet network management, not even implicitly.
The absence of statutory authority is perhaps why Members of Congress introduced legislation to
give the FCC such powers. In other words, if the Act already gave the Commission the legal
tether it seeks, why was legislation needed in the first place? I’m afraid that this leaky ship of an
Order is attempting to sail through a regulatory fog without the necessary ballast of factual or
legal substance. The courts will easily sink it.

In another act of legal sleight of hand, the Order claims that it does not attempt to classify
broadband services as Title II common carrier services. Yet functionally, that is precisely what
the majority is attempting to do to Title I information services, Title III licensed wireless
services, and Title VI video services by subjecting them to nondiscrimination obligations in the
absence of a congressional mandate. What we have before us today is a Title II Order dressed in
a threadbare Title I disguise. Thankfully, the courts have seen this bait-and-switch maneuver by
the FCC before – and they have struck it down each time. 15

13
While it is true that an agency may reverse its position, “the agency must show that there are good reasons.” FCC
v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1811 (2009). Moreover, while Fox held that “[t]he agency need not
always provide a more detailed justification than what would suffice for a new policy created on a blank slate,” the
Court noted that “[s]ometimes it must – when, for example, its new policy rests upon factual findings that contradict
those which underlay its prior policy; or when its prior policy has engendered serious reliance interest that must be
taken into account.” Id. (internal citations omitted).
14
The D.C. Circuit in Comcast set forth this framework in very plain English:
Through the Communications Act of 1934, ch. 652, 48 Stat. 1064, as amended over the decades,
47 U.S.C. § 151 et seq., Congress has given the Commission express and expansive authority to
regulate common carrier services, including landline telephony, id. § 201 et seq. (Title II of the
Act); radio transmissions, including broadcast television, radio, and cellular telephony, id. § 301 et
seq. (Title III); and “cable services,” including cable television, id. § 521 et seq. (Title VI). In this
case, the Commission does not claim that Congress has given it express authority to regulate
Comcast’s Internet service. Indeed, in its still-binding 2002 Cable Modem Order, the Commission
ruled that cable Internet service is neither a “telecommunications service” covered by Title II of
the Communications Act nor a “cable service” covered by Title VI. In re High-Speed Access to
the Internet Over Cable and Other Facilities, 17 F.C.C.R. 4798, 4802, P 7 (2002), aff'd Nat’l
Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 125 S. Ct. 2688, 162 L. Ed.
2d 820 (2005).
600 F.3d at 645.
15
See, e.g., id.; FCC v. Midwest Video Corp, 440 U.S. 689 (1979) (Midwest II).

9
 The Order’s expansive grasp for jurisdictional power here is likely to alarm any
reviewing court because the effort appears to have no limiting principle. 16 If we were to accept
the Order’s argument, “it would virtually free the Commission from its congressional tether.” 17
“As the [Supreme] Court explained in Midwest Video II, ‘without reference to the provisions of
the Act’ expressly granting regulatory authority, ‘the Commission’s [ancillary] jurisdiction …
would be unbounded.’” 18 I am relieved, however, that in the Order, the Commission is explicitly
refraining from regulating coffee shops. 19

In short, if this Order stands, there is no end in sight to the Commission’s powers.

I also have concerns regarding the constitutional implications of the Order, especially its
trampling on the First and Fifth Amendments. But in the observance of time, those thoughts are
contained in my extended written remarks.

III. The Commission’s Rules Will Cause Irreparable Harm to Broadband

Investment and Consumers.

DOJ’s cogent observation from last January regarding the competitive nature of the
broadband market raises the important issue of the likely irreparable harm to be brought about by
these new rules. In addition to government agencies, investors, investment analysts, and
broadband companies themselves have told us that network management rules would create
uncertainty to the point where crucial investment capital will become harder to find. This point
was made over and over again at the FCC’s Capital Formation Workshop on October 1, 2009. A
diverse gathering of investors and analysts told us that even rules emanating from Title I would
create uncertainty. Other evidence suggests that Internet management rules could not only make
it difficult for companies to “predict their revenues and cash flow,” but a new regime could
“have the perverse effect of raising prices to all users” as well. 20

Additionally, today’s Order implies that the FCC has price regulation authority over
broadband. In fact, the D.C. Circuit noted in its Comcast decision last spring that the
Commission’s attorneys openly asserted at January’s oral argument that “the Commission could
someday subject [broadband] service to pervasive rate regulation to ensure that … [a broadband]
company provides the service at ‘reasonable charges.’” 21 Nothing indicates that the Commission

16
For example, in the Comcast case, FCC counsel conceded at oral argument that the ancillary jurisdiction argument
there could even encompass rate regulation, if the Commission chose to pursue that path. Id. at 655 (referring to
Oral Arg. Tr. 58-59).
17
Id.
18
Id. (quoting Midwest Video II, 440 U.S. at 706).
19
Order, ¶ 52.
20
Howard Buskirk, Investors, Analysts Uneasy About FCC Direction on Net Neutrality, COMM. DAILY, Oct. 2,
2009, at 2; see also National Cable & Telecommunications Association Comments at 19; Verizon and Verizon
Wireless Reply Comments at 17–18.
21
Comcast, 600 F.3d at 655 (referring to Oral Arg. Tr. 58-59).

10
has changed its mind since then. In fact, the Order appears to support both indirect and direct
price regulation of broadband services. 22

Moreover, as lobbying groups accept this Order’s invitation to file complaints asking the
government to distort the market further the Commission will be under increasing pressure from
political interest groups to expand its power and influence over the broadband Internet market.
In fact, some of my colleagues today are complaining that the Order doesn’t go far enough.
Each complaint filed will create more uncertainty as the enforcement process becomes a de facto
rulemaking circus, just as the Commission attempted in the ill-fated Comcast/BitTorrent case. 23
How does this framework create regulatory certainty? 24 Even the European Commission
recognized the harm such rules could cause to the capital markets when it decided last month not
to impose measures similar to these. 25

Part of the argument in favor of new rules alleges that “giant corporations” will serve as
hostile “gatekeepers” to the Internet. First, in the almost nine years since those fears were first
sewn, net regulation lobbyists can point to fewer than a handful of cases of alleged misconduct,
out of an infinite number of Internet communications. All of those cases were resolved in favor
of consumers under current law.

More importantly, however, many broadband providers are not large companies. Many
are small businesses. Take, for example, LARIAT, a fixed wireless Internet service provider
serving rural communities in Wyoming. LARIAT has told the Commission that the imposition
of network management rules will impede its ability to obtain investment capital and will limit
the company’s “ability to deploy new service to currently unserved and underserved areas.” 26
Furthermore, LARIAT echoes the views of many others by asserting that, “[t]he imposition of
regulations that would drive up costs or hamper innovation would further deter future outside
investment in our company and others like it.” 27 Additionally, “[t]o mandate overly
[burdensome] network management policies would foster lower quality of service, raise
operating costs (which in turn would raise prices for all subscribers), and/or create a large
backlog of adjudicative proceedings at the Commission (in which it would be prohibitively

22
See, e.g., Order, ¶ 76.
23
See Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading
Peer-to-Peer Applications, File No. EB-08-IH-1518, Memorandum Opinion and Order, 23 FCC Rcd. 13,028 (2008)
(Comcast Order). Comcast and BitTorrent settled their dispute, in the absence of net neutrality rules, four months
before the Commission issued its legally flawed order. See, e.g., David Kirkpatrick, Comcast-BitTorrent: The Net’s
Finally Growing Up, CNN.COM, Mar. 28, 2008, at
http://money.cnn.com/2008/03/27/technology/comcast.fortune/index.htm
24
Furthermore, as Commissioner Baker has noted, with this Order the Commission is inviting parties to file
petitions for declaratory rulings, which will likely result in competitors asking the government to regulate their rivals
in advance of market action. I am hard pressed to find a better example of a “mother-may-I” paternalistic industrial
policy making apparatus.
25
Neelie Kroes, Vice President for the Digital Age, European Commission, Net Neutrality – The Way Forward:
European Commission and European Parliament Summit on “The Open Internet and Net Neutrality in Europe”
(Nov. 11, 2010).
26
LARIAT Comments at 2-3.
27
Id. at 3.

11
expensive for small and competitive ISPs to participate)”. 28 LARIAT also notes that the
imposition of net neutrality rules would cause immediate harm such that “[d]ue to immediate
deleterious impacts upon investment, these damaging effects would be likely to occur even if the
Commission’s Order was later invalidated, nullified, or effectively modified by a court challenge
or Congressional action.” 29 Other small businesses have echoed these concerns. 30

Less investment. Less innovation. Increased business costs. Increased prices for
consumers. Disadvantages to smaller ISPs. Jobs lost. And all of this is in the name of
promoting the exact opposite? The evidence in the record simply does not support the majority’s
outcome driven conclusions.

In short, the Commission’s action today runs directly counter to the laudable broadband
deployment and adoption goals of the National Broadband Plan. No government has ever
succeeded in mandating investment and innovation. And nothing has been holding back Internet
investment and innovation, until now.

IV. Existing Law Provides Ample Consumer Protection.

To reiterate, the Order fails to put forth either a factual or legal basis for regulatory
intervention. Repeated government economic analyses have reached the same conclusion: no
concentrations or abuses of market power exist in the broadband space. If market failure were to
occur, however, America’s antitrust and consumer protection laws stand at the ready. Both the
Department of Justice and the Federal Trade Commission are well equipped to cure any market
ills. 31 In fact, the Antitrust Law Section of the American Bar Association agrees. 32 Nowhere
does the Order attempt to explain why these laws are insufficient in its quest for more regulation.

28
Id. at 5 (emphasis added).
29
Letter from Brett Glass, d/b/a LARIAT, to Julius Genachowski, Chairman, FCC, et al., at 2 (Dec. 9, 2010)
(LARIAT Dec. 9 Letter).
30
See, e.g., Letter from Paul Conlin, President, Blaze Broadband, to Marlene H. Dortch, Secretary (Dec. 14, 2010)
(Blaze Broadband Dec. 14 Letter).
31
Section 2 of the Sherman Act, 15 U.S.C. § 2, prohibits conduct that would lead to monopolization. In the event of
abuse of market power, this is the main statute that enforcers would use. In the context of potential abuses by
broadband Internet access service providers, this statute would forbid: (1) Exclusive dealing – for example, the only
way a consumer could obtain streaming video is from a broadband provider’s preferred partner site; (2) Refusals to
deal (the other side of the exclusive dealing coin) – i.e., if a cable company were to assert that the only way a
content delivery network could interconnect with it to stream unaffiliated video content to its customers would be to
pay $1 million/port/month, such action could constitute a “constructive” refusal to deal if any other content delivery
network could deliver any other traffic for a $1,000/port/month price; and (3) Raising rivals’ costs – achieving
essentially the same results using different techniques.
Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, essentially accomplishes the same curative
result, only through the FTC. It generally forbids “unfair competition.” This is an effective statute to empower FTC
enforcement as long as Internet access service is considered an “information service.” The FTC Act explicitly does
not apply to “common carriers.”

See also, 15 U.S.C. §13(a), et seq.

32
ABA Comment on Federal Trade Commission Workshop: Broadband Connectivity Competition Policy, 195
Project No. V070000 (2007).

12
 Moreover, for several years now, I have been advocating a potentially effective approach
that won’t get overturned on appeal. In lieu of new rules, which will be tied up in court for
years, the FCC could create a new role for itself by partnering with already established, non-
governmental Internet governance groups, engineers, consumer groups, academics, economists,
antitrust experts, consumer protection agencies, industry associations, and others to spotlight
allegations of anticompetitive conduct in the broadband market, and work together to resolve
them. Since it was privatized, Internet governance has always been based on a foundation of
bottom-up collaboration and cooperation rather than top-down regulation. This truly “light
touch” approach has created a near-perfect track record of resolving Internet management
conflicts without government intervention.

Unfortunately, the majority has not even considered this idea for a moment. But once
today’s Order is overturned in court, it is still my hope that the FCC will consider and adopt this
constructive proposal.

In sum, what’s past is indeed prologue. Where we left the saga of the FCC’s last net
neutrality order before was with a spectacular failure in the appellate courts. Today, the FCC
seems determined to make the same mistake instead of learning from it. The only illness
apparent from this Order is regulatory hubris. Fortunately, cures for this malady are obtainable
in court. For all of the foregoing reasons, I respectfully dissent.

* * *

Extended Legal Analysis:

The Commission Lacks Authority to Impose
Network Management Mandates on Broadband Networks.

The Order is designed to circumvent the effect of the D.C. Circuit’s Comcast decision, 33
but that effort will fail. Careful consideration of the Order shows that its legal analysis ignores
the fundamental teaching of Comcast: Titles II, III, and VI of the Communications Act regulate
specific, recognized classes of electronic communications services, which consist of common
carriage telephony, broadcasting and other licensed wireless services, and multichannel video
programming services. 34 Despite any policy desires to the contrary, Congress has not yet

33
Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010).
34
The D.C. Circuit in Comcast set forth this framework in very plain English:
Through the Communications Act of 1934, ch. 652, 48 Stat. 1064, as amended over the decades,
47 U.S.C. § 151 et seq., Congress has given the Commission express and expansive authority to
regulate common carrier services, including landline telephony, id. § 201 et seq. (Title II of the
Act); radio transmissions, including broadcast television, radio, and cellular telephony, id. § 301 et
seq. (Title III); and “cable services,” including cable television, id. § 521 et seq. (Title VI). In this
case, the Commission does not claim that Congress has given it express authority to regulate
Comcast’s Internet service. Indeed, in its still-binding 2002 Cable Modem Order, the Commission
ruled that cable Internet service is neither a “telecommunications service” covered by Title II of
the Communications Act nor a “cable service” covered by Title VI. In re High-Speed Access to
the Internet Over Cable and Other Facilities, 17 F.C.C.R. 4798, 4802, P 7 (2002), aff'd Nat’l
Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 125 S. Ct. 2688, 162 L. Ed.
2d 820 (2005).

13
established a new title of the Act to govern some or all parts of the Internet – which includes the
operation, or “management,” of the networks that support the Internet’s functioning as a new and
highly complex communications platform for diverse and interactive data, voice, and video
services. Until such time as lawmakers may act, the Commission has no power to regulate
Internet network management.

As detailed below, the provisions of existing law upon which the Order relies afford the
Commission neither direct nor ancillary authority here. The tortured logic needed to support the
Order’s conclusion requires that the agency either reverse its own interpretation of its statutorily
granted express powers or rely on sweeping pronunciations of ancillary authority that lack any
“congressional tether” to specific provisions of the Act. 35 Either path will fail in court.

Instead, the judicial panel that ends up reviewing the inevitable challenges is highly likely
to recognize this effort for what it is. While ostensibly eschewing reclassification of broadband
networks as Title II platforms, the Order imposes the most basic of all common carriage
mandates: nondiscrimination, albeit with a vague “we’ll know it when we see it” caveat for
“reasonable” network management. This may be only a pale version of common carriage (at
least for now), but it is still quite discernible even to the untrained eye.

A. Reversal of the Commission’s Interpretation of Section 706 Cannot Provide Direct

Authority for Network Management Rules.

Less than one year ago, the Commission in attempting to defend its Comcast/BitTorrent
decision at the D.C. Circuit “[a]cknowledged that it has no express statutory authority over [an
Internet service provider’s network management] practices.” 36 The Commission was right then,
and the Order is wrong now. Congress has never contemplated, much less enacted, a regulatory
scheme for broadband network management, notwithstanding the significant revision of the
Communications Act undertaken through the Telecommunications Act of 1996 (1996 Act). 37 It
is an exercise in legal fiction to contend otherwise.

Any analysis of an arguable basis for the Commission’s power to act in this area must
begin with the recognition that broadband Internet access service remains an unregulated
“information service” under Title I of the Communications Act. 38 Overtly, the Order does not

600 F.3d at 645.

35
Id. at 655.
36
Id. at 644.
37
The scattered references to the Internet and advanced services in a few provisions of the 1996 Act, see, e.g., 47
U.S.C. §§ 230, 254, do not constitute a congressional effort to systemically regulate the management of the new
medium. A better reading of the 1996 Act in this regard is that Congress recognized that the emergence of the
Internet meant that something new, exciting, and yet still amorphous was coming. Rather than act prematurely by
establishing a detailed new regulatory scheme for the Net, Congress chose to leave the Net unregulated at that time.
38
Inquiry Concerning High-Speed Access to the Internet Over Cable & Other Facilities; Internet Over Cable
Declaratory Ruling; Appropriate Regulatory Treatment for Broadband Access to the Internet Over Cable Facilities,
GN Docket No. 00-185, CS Docket No. 02-52, Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC
Rcd. 4,798 (2002) (Cable Modem Declaratory Ruling); Appropriate Framework for Broadband Access to the
Internet Over Wireline Facilities et al., CC Docket Nos. 02-33, 01-337, 95-20, 98-10, WC Docket Nos. 04-242, 05-
271, Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd. 14,853 (2005) (Wireline Broadband

14
purport to change this legal classification.39 Yet a reviewing court will look beyond the Order’s
characterization of the Commission’s action to scrutinize what the new codified rules – and the
directives and warnings set forth in the text – actually do. 40 Dispassionate analysis will lead to
the conclusion that the Order attempts to relegate this type of information service to common
carriage by effectively applying major Title II obligations to it. The Title I disguise will not be
convincing.

The threadbare nature of the disguise becomes clear with scrutiny of the Order’s claims
for a legal basis for the new regulations. The Order’s only serious effort to assert direct authority
is based on Section 706. 41 The Order glosses over the key point that no language within Section
706 – or anywhere else in the Act, for that matter – bestows the FCC with explicit authority to
regulate Internet network management. Rather, Section 706’s explicit focus is on “deployment”
and “availability” of broadband network facilities. 42 So what precisely is the nexus between
Section 706’s focus on broadband deployment and availability and the Order’s focus on network
management once the facilities have been deployed and the service is available? The Order
seems to imply that Section 706 somehow provides the Commission with network management
authority because if the government lacks such power, some American might have less access to
the Internet. This rationale is contrary to the provision’s language and illogical on its face.
Imposing new regulations on network providers in the business of deploying broadband 43 will
have the opposite effect of what Section 706 seeks to do. Instead, the imposition of network
management rules will likely depress investment in deployment of broadband throughout our
nation. 44 This outcome will prove true not simply for the large providers tracked by Wall Street

Order); Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, WT
Docket No. 07-53, Declaratory Ruling, 22 FCC Rcd. 5,901 (2007) (Wireless Broadband Order).
39
Order, ¶¶ 121-23.
40
See, e.g., Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 378 (1989) (“in the context of reviewing a
decision ... courts should not automatically defer to the agency’s express reliance on an interest in finality without
carefully reviewing the record and satisfying themselves that the agency has made a reasoned decision based on its
evaluation of the significance – or lack of significance – of the new information.”).
41
To the degree that the Order suggests that other sections in the Act provide it with direct authority to impose new
Internet network management rules, such arguments are not legally sustainable. For the reasons set forth in Section
B of this extended legal analysis, infra, the claimed bases for extending even ancillary authority are unconvincing,
which renders contentions about direct authority untenable.
42
47 U.S.C. §§ 1302 (a), (b).
43
The National Broadband Plan even noted that, “[d]ue in large part to private investment and market-driven
innovation, broadband in America has improved considerably in the last decade.” Federal Communications
Commission, Connecting America: The National Broadband Plan at 3 (rel. Mar. 16, 2010) (National Broadband
Plan). Note that during this same time period of investment, no network management rules existed.
44
The Commission has been warned about this consequence many times in the recent past. For example, during the
Commission’s October 2009 Capital Formation Workshop, several investment professionals raised red flags about a
Title I approach to Internet regulation. Trade press accounts reported Chris King, an analyst at Stifel Nicolaus, as
saying that “[w]hen you look at the telecom sector or cable sector, one of the things that scares them to death is net
neutrality.... Any regulation that would limit severely [Verizon’s and AT&T’s] ability to control their own networks
to manage traffic of their own networks could certainly have a negative role in their levels of investment going
forward.” Howard Buskirk, Investors, Analysts Uneasy About FCC Direction on Net Neutrality, COMM. DAILY,
Oct. 2, 2009, at 1. Similarly, Tom Aust, a senior analyst at GE Asset Management, stated that regulatory risk is

15
analysts but for the small businesses that supply vital and competitive broadband options to
consumers in many locales across the nation. 45

A closer reading of the statutory text bears out this assessment. Turning specifically to
the language of Section 706(a), the provision opens with a policy pronouncement that the
Commission “shall encourage the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans.” 46 As Comcast already has pointed out, “under
Supreme Court and D.C. Circuit case law statements of policy, by themselves, do not create
‘statutorily mandated responsibilities.’” 47 Rather, “[p]olicy statements are just that – statements
of policy. They are not delegations of regulatory authority.” 48 The same holds true for
congressional statements of policy, such as the opening of Section 706, as it does for any
agency’s policy pronouncements.

The Order makes a strenuous effort to argue that Section 706 is not limited to
deregulatory actions, a herculean task taken on because the Order rests nearly all of its heavy
weight on this thin foundation. 49 Section 706 does refer to one specific regulatory provision –

“ultimately unknowable because it’s so broad and it can be so quick. For a company it means that they can’t predict
their revenues and cash flows as well, near or long term.” Id. at 2.
45
Network management regulations will affect the investment outlook for transmission providers large and small.
In the latter category, Brett Glass, the sole proprietor of LARIAT, a wireless Internet service provider in Wyoming,
has filed comments expressing concern that the imposition of network management rules will impede his ability to
obtain investment and will limit his “ability to deploy new service to currently unserved and underserved areas.”
LARIAT Comments at 2–3. He stated that “[t]he imposition of regulations that would drive up costs or hamper
innovation would further deter future outside investment in our company and others like it.” Id. at 3. Specifically,
he argues that “[t]o mandate overly [burdensome] network management policies would foster lower quality of
service, raise operating costs (which in turn would raise prices for all subscribers), and/or create a large backlog of
adjudicative proceedings at the Commission (in which it would be prohibitively expensive for small and competitive
ISPs to participate). Id. at 5. “Due to immediate deleterious impacts upon investment, these damaging effects
would be likely to occur even if the Commission’s Order was later invalidated, nullified, or effectively modified by
a court challenge or Congressional action.” Letter from Brett Glass, d/b/a LARIAT, to Julius Genachowski,
Chairman, FCC, et al., at 2 (Dec. 9, 2010) (Glass Dec. 9 Letter). See also Letter from Paul Conlin, President, Blaze
Broadband, to Marlene H. Dortch, Secretary (Dec. 14, 2010) (Blaze Broadband Dec. 14 Letter).
46
47 U.S.C. § 1302(a).
47
Comcast, 600 F.3d at 644.
48
Id. at 654.
49
In support of its jurisdictional arguments, the Order cites to language in Ad Hoc Telecomms. Users Comm. v.
FCC, 572 F.3d 903 (D.C. Cir. 2009). In that case, the D.C. Circuit does, in fact, state that “[t]he general and
generous phrasing of § 706 means that the FCC possesses significant albeit not unfettered, authority and discretion
to settle on the best regulatory or deregulatory approach to broadband – a statutory reality that assumes great
importance when parties implore courts to overrule FCC decisions on this topic.” Ad Hoc Telecomms., 572 F.3d at
906–07. But, there are several reasons why that statement in Ad Hoc Telecomms. cannot be used for the proposition
that Section 706 provides the FCC with the authority to impose network management rules. First, it is notable that
the petitioners in Ad Hoc Telecomms. were challenging one of the FCC’s forbearance decisions. As such, the FCC
was not relying on Section 706 authority alone in that case, it was also relying on it’s forbearance authority which is
specifically delegated to the FCC pursuant to Section 10. The D.C. Circuit made this point in Comcast, when it
rejected the FCC’s use of Ad Hoc Telecomms. for its Section 706 authority arguments. Comcast, 600 F.3d at 659
(“In [Ad Hoc Telecomms.], however, we cited section 706 merely to support the Commission’s choice between
regulatory approaches clearly within its statutory authority under other sections of the Act.”) (emphasis added).
Second, the text of Section 706(a) actually lists “regulatory forbearance” as an example of one of the tools that the

16
price cap regulation. 50 Readers should keep in mind, however, that at the time Section 706 was
enacted, 1996, price cap regulation of incumbent local exchange carriers was considered to be
deregulatory when compared to the legacy alternative: rate-of-return regulation. The
provision’s remaining language is even more broad and deregulatory. For instance, the end of
section 706(a) states that the FCC should explore “other regulating methods that remove barriers
to infrastructure investment.” 51 Additionally, its counterpart subsection, Section 706(b), states
that if the FCC’s annual inquiry determines that advanced telecommunications is not “being
deployed to all Americans in a reasonable and timely fashion” the FCC shall take action to
“remove[e] barriers to infrastructure investment and ... promot[e] competition in the
telecommunications market.” 52 As discussed above, the Order’s actions will have the opposite
effect.

Moreover, the Order’s new interpretation of Section 706(a) is self serving and outcome
determinative. The Order admits that its rationale requires reversing the Commission’s
longstanding interpretation of that subsection as conveying no authority beyond that already
provided elsewhere in the Act. 53 This arbitrary and capricious move is not supported by
evidence in the record or a change in law. 54 The Order offers the excuse that “[i]n the particular
proceedings prior to Comcast, setting out the understanding of Section 706(a) that we articulate
in this Order would not meaningfully have increased the authority that we understood the
Commission already to possess.” 55 In other words, apparently, the agency’s confused

FCC may employ in order to “encourage the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans.” 47 U.S.C. § 1302(a). By contrast, network management
regulations are not listed in Section 706 or anywhere else in the Act. Finally, as the D.C. Court reiterated in
Comcast, 600 F.3d at 659, the central issue that it focused on in Ad Hoc Telecomms. was not jurisdictional; rather it
was whether the FCC’s underlying forbearance decision had been arbitrary and capricious, specifically “when and
how much” can the FCC forbear from Title II obligations. Ad Hoc Telecomms., 572 F.3d at 904. Moreover, the
court was very clear in noting that such authority was “not unfettered.” Id. at 907.
50
On that note, the Order even highlights the fact that “706(a) expressly contemplates the use of “regulating
methods” such as price regulation.” See Order, n. 381. This aside is an unsettling foreshadow of how these rules
could be used to regulate broadband rates in the future, through either ad hoc enforcement cases or declaratory
rulings.
51
47 U.S.C. § 1302(a) (emphasis added). This focus on infrastructure investment makes sense in light of Congress’
express concern that broadband facilities quickly reach “elementary and secondary schools and classrooms,” id.,
which in 1996 may have lacked the economic appeal of business and residential districts as early targets for
infrastructure upgrades.
52
47 U.S.C. § 1302(b).
53
Order, ¶ 120.
54
While it is true that an agency may reverse its position, “the agency must show that there are good reasons.” FCC
v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1811 (2009). Moreover, while Fox held that “[t]he agency need not
always provide a more detailed justification than what would suffice for a new policy created on a blank slate,” the
Court noted that “[s]ometimes it must – when, for example, its new policy rests upon factual findings that contradict
those which underlay its prior policy; or when its prior policy has engendered serious reliance interest that must be
taken into account.” Id. (internal citations omitted). This warning is thrown into sharp focus by the billions of
dollars invested in broadband infrastructure since the Commission first began enunciating its decisions against Title
II classification of broadband Internet networks. See, e.g., AT&T Comments at 19; Verizon Comments at 22.
55
See Order, ¶ 122; see also Comcast Corp. v. FCC, 600 F.3d 642, 658 (D.C. Cir. 2010) (noting that “[i]n an earlier,
still binding order, however, the Commission ruled that section 706 ‘does not constitute an independent grant of

17
understanding of the limits of its ancillary authority meant that the Commission then did not
have to rest on Section 706(a) in order to overreach by “pursu[ing] a stand-alone policy
objective” not moored to “a specifically delegated power.” 56

The Order’s reliance on Section 706(b) as providing a statutory foundation for network
management regulations is similarly flawed. That subsection requires that the FCC determine on
an annual basis whether “advanced telecommunications capability is being deployed to all
Americans in a reasonable and timely fashion.” 57 Congress then further directed the
Commission, if the agency’s determination were negative, to “take immediate action to
accelerate deployment of such capability by removing barriers to infrastructure investment and
by promoting competition in the telecommunications market” (emphasis added). 58

To justify its use of this trigger, the Order points to the fact that approximately six
months ago, the Commission on a divided 3-2 vote issued a report finding – for the first time in
history – that “broadband deployment to all Americans is not reasonable and timely.” 59 This
determination, in conflict with all previous reports dating back to 1999, was both perplexing and
unsettling. It ignored the impressive strides the nation has made in developing and deploying
broadband infrastructure and services since issuance of the first 706 Report. Amazingly enough,
the most recent 706 Report managed to find failure even while pointing to data (first made public
in the National Broadband Plan) showing that “95% of the U.S. population lives in housing units
with access to terrestrial, fixed broadband infrastructure capable of supporting actual download
speeds of at least 4 Mbps.” 60 In fact, only 15 percent of Americans had access to residential
broadband services in 2003. 61 Only seven years later, 95 percent enjoyed access, making
broadband the fastest penetrating disruptive technology in history. 62 At the time that I dissented
from the 706 Report, I expressed concern that its findings could be a pretext for justifying
additional regulation, rather than “removing barriers to infrastructure investment.” 63
Unfortunately, this Order reveals that my fears were well founded.

authority.’” (quoting Deployment of Wireline Servs. Offering Advanced Telecomms. Capability, CC Docket No. 98-
147, Memorandum Opinion and Order, 13 FCC Rcd. 24,012, 24,047 ¶ 77 (1988)).
56
Comcast, 600 F.3d at 659.
57
47 U.S.C. § 1302(b).
58
Id.
59
Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a
Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the
Telecommunications Act of 1996, GN Docket No. 09-137, Sixth Broadband Deployment Report, 25 FCC Rcd.
9,556, 9,558 ¶¶ 2–3 (2010). Commissioner Baker and I dissented from the July 2010 adoption of the latest Section
706 Report.
60
National Broadband Plan at 20.
61
See John Horrigan, Pew Internet and American Life Project, Home Broadband Adoption 2009, 11 (2009).
62
National Broadband Plan at 20.
63
47 U.S.C. § 1302(b).

18
 One is left to wonder where this assertion of power, if left unchecked, may lead next. 64
As for the Order itself, the short-term path is clear: It will be challenged in court. Once there,
the Commission must struggle with the fact that the empirical evidence in this docket
demonstrates “no relationship whatever” between the plain meaning of Section 706 and the
network management rules being adopted. 65

B. Efforts to Advance New Arguments for Exercising Ancillary Authority Will Not
Survive Court Review.

In spite of the D.C. Circuit’s decision in Comcast, the Order attempts to continue to assert
ancillary authority as another basis for its imposition of network management rules. To bolster
the Commission’s case this time, the Order points to some provisions of the Act that it failed to
cite the first time around. Its arguments for new and putatively better bases for network
management rules fall victim largely to the same weaknesses the court identified before.

Efforts to defend a valid exercise of the agency’s ancillary powers are subject to a two-
part test – and the “central issue,” as the D.C. Circuit already has explained, is whether the
Commission can satisfy the second prong of the test. 66 Under it, “[t]he Commission may
exercise this ‘ancillary’ authority only if it demonstrates that its action ... is ‘reasonably ancillary
to the ... effective performance of its statutorily mandated responsibilities.’” 67

Those “statutorily mandated responsibilities” must be concrete and readily identifiable.

As the Supreme Court instructed in NARUC II and the D.C. Circuit reiterated in Comcast, “the
Commission’s ancillary authority ‘is really incidental to, and contingent upon, specifically
delegated powers under the Act.’” 68 For the ancillary authority arguments to prevail here, the
Order must identify specific subsections within Title II, III or VI that provide the ancillary hook,
and then show how the Commission’s assertion of power will advance the regulated services
directly subject to those particular provisions. Existing court precedent shows that sweeping
generalizations are not sufficient. 69 Nor may the general framework of one title of the Act –
64
If the Commission is successful with this assertion of authority, the agency could use Section 706 as an essentially
unfettered mandate to impose not only new regulations but to pick winners and losers – all without any grant of
authority from Congress to intervene in the marketplace in such a comprehensive manner. In fact, this Order has
already done so. For example, it decides that these new network management rules will apply to broadband Internet
service providers but not to edge providers. See Order, ¶ 50. The Order makes an interesting attempt to justify this
line-drawing. It rationalizes, inter alia, that because the new regulatory scheme is putatively an outgrowth of the
Commission’s Internet Policy Statement, which was not aimed at edge providers, the Order’s new mandates should
not apply to those entities either. This argument is irrationally selective at best and arbitrary and capricious at worst.
If the Commission’s Internet Policy Statement was the “template” for the rules, why isn’t the substance of the rules
the same as the previous principles? In particular, why does the Order add nondiscrimination to the regulations
when that concept was never part of the previous principles?
65
Comcast, 600 F.3d at 654.
66
Id. at 647.
67
Id. at 644 (citing Library Ass’n v. FCC, 406 F.3d 689, 692 (D.C. Cir. 2005).
68
Id. at 653 (emphasis in original) (citing Nat’l Ass’n of Regulatory Util. Comm’rs v. FCC, 533 F.2d 601, 612 (D.C.
Cir. 1976) (NARUC II)).
69
Compare Order, ¶ 133 (opining that Open Internet rules for wireless services are supported by Title III of the
Communications Act pursuant to the Commission’s authority “to protect the public interest through spectrum

19
such as common carriage obligations – be grafted upon services subject to another title that does
not include the same obligations. 70 And long descriptions of services delivered via broadband
networks do not substitute for hard legal analysis. 71

Moreover, arguments must be advanced on “a case-by-case basis” for each specific

assertion of jurisdiction. 72 Comcast explains that the Commission must “independently
justif[y]” any action resting on ancillary authority by demonstrating in each and every instance
how the action at issue advances the services actually regulated by specific provisions of the
Act. 73 The D.C. Circuit apparently was concerned about the Commission’s ability to grasp this
point, for the opinion makes it repeatedly. 74 In doing so, the court directed the Commission to

licensing”) with Comcast, 600 F.3d at 651 (“each and every assertion of jurisdiction ... must be independently
justified as reasonably ancillary to the Commission’s power”) (emphasis in original).
70
See Comcast, 600 F.3d. at 653 (discussing how the NARUC II court “found it ‘difficult to see how any action
which the Commission might take concerning two-way cable communications could have as its primary impact the
furtherance of any broadcast purpose.’”) (emphasis added); id at 654 (discussing the Midwest Video II court’s
recognition that the Communications Act bars common carrier regulation of broadcasting and therefore rejecting the
imposition of public access obligations on cable because the rules would “relegate[ ] cable systems ... to common-
carrier status.”).
71
The fact that some regulated services may be mixed on the same transmission platform with unregulated traffic
does not afford the Commission scope to impose legal obligations on all data streams being distributed via that
system. For example, the D.C. Circuit also has rejected other past Commission efforts to extend its ancillary reach
over all services offered via a transmission platform merely because the platform provider uses it to provide one
type of regulated service along with other services not subject to the same regulatory framework. See id. at 653
(citing NARUC II, 533 F.2d at 615–16, that overturned a series of Commission orders that preempted state
regulation of non-video uses of cable systems, including precursors to modern cable modem service); NARUC II,
533 F.2d at 616 (“[T]he point-to-point communications ... involve one computer talking to another....”). The Order
appears to be silent on this issue.
72
Comcast, 600 F.3d at 651. As the Comcast decision explained, although “the Commission’s ancillary authority
may allow it to impose some kinds of obligations on cable Internet providers,” it does not follow that the agency
may claim “plenary authority over such providers.” Id. at 650. To do so, would “run[ ] afoul” of the Supreme Court
precedent set forth in Southwestern Cable and Midwest Video I.” Id. See also id. (“Nothing in Midwest Video I
even hints that Southwestern Cable’s recognition of ancillary authority over one aspect of cable television meant
that the Commission had plenary authority over all aspects of cable.”).
73
Id. at 651. It follows that the potential for years of litigation over individual enforcement cases is high, thereby
leading to a period of prolonged uncertainty that likely will discourage further investment in broadband
infrastructure, contrary to the directives of Sec. 706.
74
See, e.g., id. at 651, 653. For example, the court untangled the Commission’s arguments about the implications of
language in Brand X for the agency’s assertion of authority over Internet network management by explaining that:
[n]othing in Brand X, however, suggests that the Court was abandoning the fundamental approach
to ancillary authority set forth in Southwestern Cable, Midwest Video I, and Midwest Video II.
Accordingly, the Commission cannot justify regulating the network management practices of
cable Internet providers simply by citing Brand X’s recognition that it may have ancillary
authority to require such providers to unbundle the components of their services. These are
altogether different regulatory requirements. Brand X no more dictates the result of this case than
Southwestern Cable dictated the results of Midwest Video I, NARUC II, and Midwest Video II.
The Commission’s exercise of ancillary authority over Comcast’s network management practices
must, to repeat, “be independently justified.” (emphasis added) (internal citation omitted).

20
more closely study the agency’s failures in NARUC II and Midwest Video II to comprehend the
limits of its ancillary reach. 75

The Order’s claim of ancillary jurisdiction is not convincing with respect to Title II
because, inter alia, it invokes only Section 201 in support of its nondiscrimination mandate. 76
Yet in a glaring omission, Section 201 does not reference nondiscrimination – that concept is
under the purview of Section 202, which appears not to be invoked in the Order. 77 (By this
omission, it appears that the Order may be attempting an end run around the most explicit Title II
mandates because of other considerations.) Nor are the arguments successful with respect to the
Title III and VI provisions cited in the Order because those statutory mandates address services
that are not subject to common carriage-style nondiscrimination obligations absent explicit
application of statutory directives. 78

75
Id. at 653–54.
76
It is curious that in reciting several provisions of Title II as potential bases for ancillary jurisdiction, the Order
avoids the most obvious one: Section 202(a), which explicitly authorizes the nondiscrimination mandate imposed
on Title II common carriers. This oversight is especially curious given the Order’s reliance on the statutory canon of
“the specific trumps the general” in revising the agency’s interpretation of Section 706. See Order, ¶¶ 117-23
(distinguishing Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket
No. 98-147, Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd. 24,012 (1998)
(Advanced Services Order) as limited only to the determination that the general provisions of Section 706 did not
control the specific forbearance provisions of Section 10). That canon would seem to apply here as well, given that
Section 202(a) certainly is more specific about nondiscrimination than is Section 706. Perhaps reliance on Section
202(a) as a basis for ancillary authority was omitted here in order to avoid reopening divisions over potential Title II
reclassification? Of course, any effort to classify broadband Internet access as a common carrier service would
confront a different set of serious legal and policy problems, see, e.g., Cable Modem Declaratory Ruling, GN
Docket No. 00-185, CS Docket No. 02-52, Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd.
4,798 (2002); Wireline Broadband Order, CC Docket Nos. 02-33, 01-337, 95-20, 98-10, WC Docket Nos. 04-242,
05-271, Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd. 14,853 (2005); Wireless Broadband
Order, WT Docket No. 07-53, Declaratory Ruling, 22 FCC Rcd. 5,901 (2007), but violation of this basic canon of
statutory construction would not be among them.
77
Section 202(a)’s prohibition against “unjust or unreasonable discrimination” carries with it decades of agency and
court interpretation which is much different from the Order’s “nondiscrimination” mandate. For instance, the Order
questions the reasonableness of tiered pricing and paid prioritization. Under the case history of Section 202, tiered
pricing and concepts similar to paid prioritization are not presumed to constitute “unjust or unreasonable
discrimination.” See, e.g., Nat’l Ass’n of Regulatory Util. Comm’rs v. FCC, 737 F.2d 1095, 1133 (D.C. Cir. 1984)
(“But when there is a neutral, rational basis underlying apparently disparate charges, the rates need not be unlawful.
For instance, when charges are grounded in relative use, a single rate can produce a wide variety of charges for a
single service, depending on the amount of the service used. Yet there is no discrimination among customers, since
each pays equally according to the volume of service used.”); Competitive Telecomm. Ass’n v. FCC, 998 F.2d 1058,
1064 (D.C. Cir. 1993) (“By its nature, § 202(a) is not concerned with the price differentials between qualitatively
different services or service packages. In other words, so far as ‘unreasonable discrimination’ is concerned, an apple
does not have to be priced the same as an orange.’”).
78
See, e.g., 47 U.S.C. § 153(11); FCC v. Midwest Video Corp, 440 U.S. 689, 705 (1979) (Midwest II) (construing
the statute to prohibit treating broadcasters – and, by extension, cable operators – as common carriers). See also
infra pp. 21-25. With respect to those Title III services that are subject to some common carriage regulation, mobile
voice service providers bear obligations pursuant to explicit provisions of Title II of the Act, including but not
limited to the provision of automatic voice roaming (Sections 201 and 202); maintainance of privacy of customer
information, including call location information explicitly (Section 222); interconnection directly or indirectly with
the facilities and equipment of other telecommunications carriers (Section 251); contribution to universal service

21
 In addition, the Order’s expansive grasp for jurisdictional power here is likely to alarm
any reviewing court because the effort appears to have no limiting principle. 79 The D.C.
Circuit’s warning in Comcast against one form of overreaching – the misreading of policy
statements as blanket extensions of power – applies here as well:

Not only is this argument flatly inconsistent with Southwestern Cable, Midwest
Video I, Midwest Video II, and NARUC II, but if accepted it would virtually free
the Commission from its congressional tether. As the Court explained in Midwest
Video II, “without reference to the provisions of the Act” expressly granting
regulatory authority, “the Commission’s [ancillary] jurisdiction ... would be
unbounded.” Indeed, Commission counsel told us at oral argument that just as the
Order seeks to make Comcast’s Internet service more “rapid” and “efficient,” the
Commission could someday subject Comcast’s Internet service to pervasive rate
regulation to ensure that the company provides the service at “reasonable
charges.” Were we to accept that theory of ancillary authority, we see no reason
why the Commission would have to stop there, for we can think of few examples of
regulations that apply to Title II common carrier services, Title III broadcast
services, or Title VI cable services that the Commission, relying on the broad
policies articulated in section 230(b) and section 1, would be unable to impose
upon Internet service providers. If in Midwest Video I the Commission
“strain[ed] the outer limits of even the open-ended and pervasive jurisdiction that
has evolved by decisions of the Commission and the courts,” and if in NARUC II
and Midwest Video II it exceeded those limits, then here it seeks to shatter them
entirely. 80

Some of the Order’s most noteworthy flaws are addressed below.

1. The Order’s patchwork citation of Title II provisions does not provide the
necessary support for extending common carriage obligations to broadband
Internet access providers.

Comcast instructs the Commission that the invocation of any Title II citation as a basis
for ancillary jurisdiction must be shown to be “integral to telephone communication.” 81 The

subsidies (Section 254); and obligation to ensure that service is accessible to and usable by persons with disabilities
(Section 255).
79
For example, in the Comcast case, the FCC counsel conceded at oral argument that the ancillary jurisdiction
argument there could even encompass rate regulation, if the Commission chose to pursue that path. Comcast, 600
F.3d at 655.
80
Id. at 655 (emphasis added).
81
Id. at 657–58 (discussing Nat’l Ass’n of Regulatory Util. Comm’rs v. FCC, 880 F.2d 422, 425 (D.C. Cir. 1989)
(NARUC III) and noting that “the Commission had emphasized that ‘[o]ur prior preemption decisions have generally
been limited to activities that are closely related to the provision of services and which affect the provision of
interstate services.’ The term ‘services’ referred to ‘common carrier communication services’ within the scope of
the Commission’s Title II jurisdiction. ‘In short,’ the Commission explained, ‘the interstate telephone network will
not function as efficiently as possible without the preemptive detariffing of inside wiring installation and
maintenance.’ The Commission’s pre-emption of state regulation of inside wiring was thus ancillary to its
regulation of interstate phone service, precisely the kind of link to express delegated authority that is absent in this

22
Order’s efforts to meet this legal requirement are thin and unconvincing – and in some instances
downright perplexing. For example, it points to Section 201 in arguing that it provides the
Commission with “express and expansive authority” 82 to ensure that the “charges [and] practices
in connection with” 83 telecommunications services are “just and reasonable”. 84 The Order
contends that the use of interconnected VoIP services via broadband is becoming a substitute
service for traditional telephone service and therefore certain broadband service providers might
have an incentive to block VoIP calls originating on competitors’ networks. The Order then
stretches Section 201’s language concerning “charges” and “practices” to try to bolster the claim
that it provides a sufficient nexus for ancillary jurisdiction over potential behavior by
nonregulated service providers that conceptually would best be characterized as
“discrimination.” 85 There are at least two obvious weaknesses in this rationale. First, the Order
ignores the D.C. Circuit’s instruction that the Commission has “expansive authority” only when
it is “regulating common carrier services, including landline telephony.” 86 Yet broadband
Internet access providers are not common carriers and the Order purposely avoids declaring them
to be so. Second, the Order seems to pretend that the plain meaning of Section 201’s text is
synonymous with that of Section 202, which does address “discrimination” but is not directly
invoked here.

The Order’s reliance on Section 251(a)(1) is flawed for similar reasons. That provision
imposes a duty on telecommunications carriers “to interconnect directly or indirectly with the
facilities of other telecommunications carriers.” 87 The Order notes that an increasing number of
customers use VoIP services and posits that if a broadband Internet service provider were to
block certain calls via VoIP, it would ultimately harm users of the public switched telephone
network. All policy aspirations aside, this jurisdictional argument fails as a legal matter. As the
Order admits, VoIP services have never been classified as “telecommunications services,” i.e.,
common carriage services, under Title II of the Act.88 Therefore, as a corollary matter,
broadband Internet service providers are not “telecommunications carriers” – or at least the
Commission has never declared them to be so. The effect of the Order is to do indirectly what
the Commission is reluctant to do explicitly.

case.” (quoting Detariffing the Installation and Maintenance of Inside Wiring, CC Docket No. 79-105,
Memorandum Opinion and Order, 1 FCC Rcd. 1,190, 1,192, ¶ 17 (1986)).
82
Order, ¶ 125 (quoting Comcast, 600 F.3d at 645).
83
47 U.S.C. § 201(b).
84
Id.
85
The term “discrimination” in the context of communications networks is not a synonym for “anticompetitive
behavior.” While the word “discriminate” has carried negative connotations, network engineers consider it
“network management” – because in the real world the Internet is able to function only if engineers may
discriminate among different types of traffic. For example, in order to ensure a consumer can view online video
without distortion or interruption, certain bits need to be given priority over other bits, such as individual emails.
This type of activity is not necessarily anticompetitive.
86
Comcast, 600 F.3d at 645 (citing to Section 201).
87
47 U.S.C. 251(a)(1).
88
See Vonage Holdings Corporation Petition for Declaratory Ruling Concerning an Order of the Minnesota Public
Utilities Commission, WC Docket No. 03-211, Memorandum Opinion and Order, 27 FCC Rcd. 22,404 ¶¶ 14, 20–22
(2004).

23
 2. The language of Title III and VI provisions cannot be wrenched out of
context to impose common carriage obligations on non-common carriage
services.

The Order makes a rather breathtaking attempt to find a basis for ancillary authority to
impose nondiscrimination and other common carriage mandates in statutory schemes that since
their inception have been distinguished from common carriage. This effort, too, will fail in
court, for it flouts Supreme Court precedent on valid exercises of ancillary authority, as reviewed
in detail in Comcast. If the “derivative nature of ancillary jurisdiction” 89 has any objectively
discernible boundaries, it must bar the Commission from taking obligations explicitly set forth in
one statutory scheme established in the Act – such as the nondiscrimination mandates of Title II
– and grafting them into different statutory schemes set forth in other sections of Act, such as
Title III and Title VI, that either directly or indirectly eschew such obligations. Here, the Act
itself explicitly distinguishes between broadcasting and common carriage. 90 And the Supreme
Court long ago drew the line between Title VI video services and Title II-style mandates by
forbidding the Commission to “relegate[] cable systems ... to common-carrier status”. 91

The Order’s effort to search high and low through provisions of the Communications Act
to find hooks for ancillary jurisdiction may be at its most risible in the broadcasting context. The
attempt here seems hardly serious, given that the legal discussion is limited to a one-paragraph
discussion that cites to no specific section within Title III. 92 Rather, it stands its ground on the
observation that TV and radio broadcasters now distribute content through their own websites –
coupled with the hypothetical contention that some possible future “self-interested” act by
broadband providers could potentially have a negative effect on the emerging business models
that may provide important support for the broadcast of local news and other programming. 93

This is far from the kind of tight ancillary nexus that the Supreme Court upheld in
Southwestern Cable and Midwest Video I, 94 and it is even more attenuated than the jurisdictional

89
See Comcast, 600 F.3d at 654.
90
47 U.S.C. § 153(11).
91
See Comcast, 600 F.3d at 654 (citing Midwest Video II, 440 U.S. 689, 700–01) (Commission could not “relegate[
] cable systems ... to common-carrier status”). Although the Midwest Video II case predated congressional
enactment of cable regulation, none of the statutory amendments of the Communications Act since that time – the
1984 Cable Act, the Cable Consumer Protection and Competition Act of 1992, and the Telecommunications Act of
1996 – have imposed any form of Title II-style nondiscrimination mandates on the multichannel video services
regulated pursuant to Title VI. To the contrary, the court has recognized that by its nature MVPD service involves a
degree of editorial discretion that places it outside the Title II orbit. See, e.g., Denver Area Educ. Telecomm.
Consortium, Inc., v. FCC, 518 U.S. 727 (1996) (DAETC) (upholding § 10(a) of the 1992 Cable Act, which permitted
cable operators to restrict indecency on leased access channels).
92
Order, ¶ 128.
93
Id.
94
United States v. Southwestern Cable, 392 U.S. 157 (1968) (upholding a limit on cable operators’ importation of
out-of-market broadcast signals); United States v. Midwest Video Corp., 406 U.S. 649 (1972) (Midwest Video I)
(plurality opinion upholding FCC rule requiring cable provision of local origination programming); id. at 676
(Burger, C.J., concurring) (“Candor requires acknowledgment, for me, at least, that the Commission’s position
strains the outer limits of even the open-ended and pervasive jurisdiction that has evolved by decisions of the
Commission and the courts.”). With respect to the local origination programming mandate at issue in Midwest

24
stretch that the Court rejected in Midwest Video II. 95 One wonders how far this new theory for
an ancillary reach could possibly extend. Many broadcasters for years have benefitted through
the sales of tapes and DVDs of their programming marketed through paper catalogs. Does the
rationale here mean that the Commission has power to regulate the management of that
communications platform, too?

The equally generalized Title III arguments based on “spectrum licensing” apparently are
intended to support jurisdiction over the many point-to-point wireless services that are not point-
to-multipoint broadcasting. They, too, appear off-point. 96 For example, the Order’s recitation of
a long array of Title III provisions (e.g., maintenance of control over radio transmissions in the
U.S., imposition of conditions on the use of spectrum) seems misplaced. If this overview is
intended to serve as analysis, it contains a logical flaw: Most of the rules adopted today are not
being applied – yet – to mobile broadband Internet access service. 97 Certainly the Commission
need not depend on the full sweep of Title III authority to impose the “transparency” rule; it need
only act in our pending “Truth-in-Billing” docket. 98 Similarly, with regard to the “no blocking”
rule, the Order need only rest on the provisions of Title III discussed in the 700 MHz Second
Report and Order, where this rule was originally adopted. 99

With respect to the asserted Title VI bases for ancillary jurisdiction, the Order actually
does point to three specific provisions, but none provides a firm foundation for extending the
Commission’s authority to encompass Internet network management. The Order first cites
Section 628, which is designed to promote competition among the multichannel video
programming distributors (MVPDs) regulated under Title VI, such as cable operators and
satellite TV providers. The best-known elements of this provision authorize our program access
rules, but the Commission recently has strayed – over my dissent – beyond the plain meaning of

Video I, the Commission reportedly “stepped back from its position during the course of the ... litigation” by
“suspend[ing] the ... rule and never reinstat[ing] it.” T. BARRON CARTER, JULIET L. DEE & HARVEY L. ZUCKMAN,
MASS COMMUNICATIONS LAW 522–23 (West Group 2000).
95
Midwest Video II, 440 U.S. at 694–95 (rejecting rules mandating cable provision of public access channels, which
the FCC claimed were justified by “longstanding communications regulatory objectives” to “increas[e] outlets for
local self-expression and augment[ ] the public’s choice of programs”).
96
One therefore must wonder whether by this argument the Order seeks to pave the way for future regulation of
mobile broadband Internet services. The Order has taken great pains to explain that today’s treatment of mobile
broadband Internet access service providers is in consumers’ best interest. History suggests that the Order may
merely be postponing the inevitable. In fact, the new rule (Section 8.7) need only be amended by omitting one
word: “fixed.” The Commission will be poised to do just that when it reviews the new regulations in two years.
97
Taking the Order at its apparent word that it is not (yet) applying all new mandates on wireless broadband Internet
service providers, it must be that the Order invokes the Commission’s Title III licensing authority to impose the
rules on fixed broadband Internet access service providers – that is, cable service providers, common carriers, or
both. If so, this is curious on its face because these services are regulated under Titles VI and II, respectively, and as
a legal matter the Commission does not “license” either cable service providers or common carriers.
98
See Truth-in-Billing and Billing Format, CC Docket No. 98-170, Notice of Inquiry, 24 FCC Rcd. 11,380 (rel Aug.
28, 2009) (Aug. 2009 Truth-in-Billing NOI).
99
See Service Rules for the 698-746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Report & Order,
22 FCC Rcd 15289 (2007).

25
the statutory language to read away explicit constraints on our power in this area.100 Apparently
the Commission is about to make a bad habit of doing this.

Of course, Section 628 does not explicitly refer to the Internet, much less the
management of its operation. The Congressional framers of the Cable Consumer Protection and
Competition Act of 1992, of which Section 628 was a part, were concerned about, and
specifically referenced, video services regulated under Title VI. 101 Yet the Order employs a
general statutory reference to “unfair methods of competition or unfair or deceptive acts or
practices” as a hook for a broad exercise of ancillary jurisdiction over an unregulated network of
networks. 102 This time the theory rests largely on the contention that, absent network
management regulation, network providers might improperly interfere with the delivery of “over
the top” (OTT) video programming that may compete for viewer attention with the platform
providers’ own MVPD services. 103 The Order cites to no actual instances of such behavior,
however, nor does it grapple with the implications of the market forces that are driving MVPDs
in the opposite direction – to add Internet connectivity to their multichannel video offerings. 104

100
See Review of the Commission’s Program Access Rules and Examination of Programming Tying Arrangements,
MB Docket No. 07-198, First Report and Order, 25 FCC Rcd. 746 (2010) (Terrestrial Loophole Order); id. at 822
(McDowell, Comm’r dissenting) (“Section 628 refers to ‘satellite’-delivered programming 36 times throughout the
length of the provision, including 14 references in the subsections most at issue here. The plain language of Section
628 bars the FCC from establishing rules governing disputes involving terrestrially delivered programming, whether
we like that outcome or not.”). This FCC decision currently is under challenge before the D.C. Circuit. See
Cablevision Systems Corporation v. FCC, No. 10-1062 (D.C. Cir. filed March 15, 2010).
101
See 47 U.S.C. § 522(13) (defining “multichannel video programming distributor”). Some of the transmission
systems used by such distributors, such as satellites, also are regulated under Title III.
102
Order, ¶ 130 (citing 47 U.S.C. § 548(b)).
103
The D.C. Circuit has upheld the Commission’s reliance on Section 628(b) to help drive the provision of
competitive Title VI multichannel video programming services into apartment buildings and similar “multi-dwelling
unit” developments, see Nat’l Cable & Telcoms. Ass’n v. FCC, 567 F.3d 659 (D.C. Cir. 2009), but the policy thrust
of that case unquestionably concerned Title VI video services. As the Order acknowledges, it is an open question as
to whether OTT video providers might someday be made subject to Title VI, with all of the attendant legal rights
and obligations that come with that classification. Order at n. 417. But it is misleading in suggesting that the
regulatory classification of OTT video providers has been pending only since 2007. Id. On the contrary, it has been
pending before the Commission since at least 2004 in the IP Enabled Services docket, WCB Docket 04-36, and the
agency has consistently avoided answering the question ever since. While I do not prejudge the outcome of that
issue, I question the selective invocation of sections of Title VI here as a basis for ancillary jurisdiction. Such
overreaching seems to operate as a way of prolonging our avoidance of an increasingly important, albeit complex,
matter.
104
See, e.g., Letter from William M. Wiltshire, Counsel for DIRECTV, to Marlene H. Dortch, Secretary, FCC, at 1
(Oct. 1, 2010) (DIRECTV Oct. 1 Ex Parte Letter) (outlining the wealth of innovative devices currently available in
the market, including AppleTV, Boxee, and Roku); Adam Satariano & Andy Fixmer, ESPN to Web Simulcast, Make
Pay TV Online Gatekeeper, BLOOMBERG, Oct. 15, 2010, at http://www.bloomberg.com/news/2010-10-15/espn-to-
stream-channels-to-time-warner-cable-users-to-combat-web-rivals.html (explaining ESPN’s plan to begin streaming
its sports channels online to Time Warner Cable Inc. customers as part of the pay-TV industry’s strategy to fend off
Internet competitors); Walter S. Mossberg, Google TV: No Need To Tune In Just Yet, WALL ST. J., Nov. 18, 2010, at
D1 (comparing Google TV technology to its rivals Apple TV and Roku); Louis Trager, Netflix Plans Rapid World
Spread of Streaming Service, COMM. DAILY, Nov. 19, 2010, at 7 (examining Netflix’s plans to offer a streaming-
only service in competition with Hulu Plus, as well as its plans for expansion worldwide).

26
 The second Title VI provision upon which the Order stakes a claim for ancillary
jurisdiction is Section 616, which regulates the terms of program carriage agreements. 105 The
specific text and statutory design of this provision make plain that it addresses independently
produced content carried by contract as part of a transmission platform provider’s Title VI
MVPD service, and not a situation in which there is no privity of contract and the service is
Internet access. The Order attempts to make much of Section 616’s rather broad definition
“video programming vendor” without grappling with the incongruities created when one tries to
shove the provision’s explicit directives about carriage contract terms into the Internet context. 106
In fact, the application of Section 616 here is only comprehensible if one conceives of it as a new
flavor of common carriage, with all the key contract terms supplied by statute.107 Such a
reading, however, would be in considerable conflict with the rationale of Midwest Video II, 108 as
the D.C. Circuit in Comcast already has noted. 109

In short, the Order’s efforts to find a solid grounding for exercising ancillary power here
– and thereby imposing sweeping new common carriage-style obligations on an unregulated
service – strain credulity. Policy concerns cannot overcome the limits of the agency’s current
statutory authority. The Commission should heed the closing admonition of Comcast:

[N]otwithstanding the “difficult regulatory problem of rapid technological

change” posed by the communications industry, “the allowance of wide latitude in
the exercise of delegated powers is not the equivalent of untrammeled freedom to
regulate activities over which the statute fails to confer ... Commission authority.”
Because the Commission has failed to tie its assertion of ancillary authority over

105
47 U.S.C. § 536.
106
For example, Section 616(a)(1) bars cable operators from linking carriage to the acquisition of a financial interest
in the independent programmers’ channel – a restraint borrowed from antitrust principles that is readily
understandable in the context of a traditional cable system with a limited amount of so-called “linear channel” space.
The construct does not conform easily to the Internet setting, which is characterized by a considerably more flexible
network architecture that allows end users to make the content choices – and which affords them access to literally
millions of choices that do not resemble “video programming” as it is defined in Title VI, see 47 U.S.C. §522(20),
including but not limited to simple, text-heavy websites, video shorts and all manner of personalized exchanges of
data.
107
The federal government first involved itself in setting basic rates, terms, and conditions in the context of service
agreements between railroads and their customers, but at least one historian (and former FCC commissioner) traced
the “‘ancient law’ of common carriers” back to the development of stage coaches and canal boats. See GLEN O.
ROBINSON, “THE FEDERAL COMMUNICATIONS ACT: AN ESSAY ON ORIGINS AND REGULATORY PURPOSE,” IN A
LEGISLATIVE HISTORY OF THE COMMUNICATIONS ACT OF 1934, 26 (Max D. Paglin, ed. 1989) (noting that a 19th
Century Supreme Court case identified the concept emerging as far back as the reign of William and Mary).
108
In Midwest Video II, the Supreme Court invalidated FCC rules that would have required cable operators to
provide public access channels. The Court reasoned that, in the absence of explicit statutory authority for such
mandates, the public access rules amounted to an indirect effort to impose Title II common carriage obligations –
and that, in turn, conflicted with the Title III basis for the agency’s ancillary jurisdiction claim. See 440 U.S. at 699-
02.
109
Comcast, 600 F.3d at 654.

27
 Comcast’s Internet service to any “statutorily mandated responsibility,” we ...
vacate the Order. 110

The same fate awaits this new rulemaking decision.

C. The Order Will Face Serious Constitutional Challenges.

It is reasonable to assume that broadband Internet service providers will challenge the
FCC ruling on constitutional grounds as well. 111 Contrary to the Order’s thinly supported
assertions, broadband ISPs are speakers for First Amendment purposes – and therefore
challenges on that basis should not be so lightly dismissed. There are several reasons for being
concerned about legal infirmities here.

First, the Order is too quick to rely on simplistic service labels of the past in brushing off
First Amendment arguments. For example, while it ostensibly avoids classifying broadband
providers as Title II common carriers, it still indirectly alludes to old case law concerning the
speech rights of common carriers by dismissing broadband ISPs as mere “conduits for speech”
undeserving of First Amendment consideration. 112 There is good reason today to call into
question well-worn conventional wisdom dating from the era of government-sanctioned

110
Comcast, 600 F.3d at 661 (internal citations omitted).
111
The Order incorrectly asserts that the new network management rules raise no serious questions about a Fifth
Amendment taking of an Internet transmission platform provider’s property. At the outset, the Order too quickly
dismisses the possibility that these rules may constitute a per se permanent occupation of broadband networks.
Under Loretto v. Teleprompter Manhattan CATV Corp., a taking occurs when the government authorizes a
“permanent physical occupation” of property “even if they occupy only relatively insubstantial amounts of space
and do not seriously interfere with the [owner’s] use of the rest of his [property].” 458 U.S. 419, 430 (1982). Here,
the new regulatory regime effectively authorizes third-party occupation of some portion of a broadband ISP’s
transmission facilities by constraining the facility owner’s ability to decide how to best manage the traffic running
over the broadband platform. The new strictures have parallels to the Commission’s decision to grant competitive
access providers the right to the exclusive use of a portion of local telephone company’s central office facilities – an
action which the D.C. Circuit held constituted a physical taking. Bell Atlantic Tel. Cos. v. FCC, 24 F.3d 1441, 1445
(D.C. Cir. 1994).
But even assuming arguendo that the regulations may not constitute a physical taking, they still trigger serious
“regulatory takings” concerns. Today’s situation differs from the one at issue in Cablevision Systems Corp. v FCC,
where the court held that Cablevision had failed “to show that the regulation had an economic impact that interfered
with ‘distinct investment backed expectations.’” 570 F.3d 83, 98–99 (2d Cir. 2009). Here, many obvious
investment-backed expectations are at stake: Network operators have raised, borrowed, and spent billions of dollars
to build, maintain, and modernize their broadband plant – based at least in part on the expectation that they would
recoup their investment over future years under the deregulatory approach to broadband that the Commission first
adopted for cable in 2002 and quickly extended to other types of facilities. Moreover, today’s action could result in
significant economic hardships for platform providers even if they have no debt load to pay off. For example, the
Order announces the government’s “expectation” that platform providers will build-out additional capacity for
Internet access service before or in tandem with expanding capacity to accommodate specialized services. Order, ¶
114. Although property owners may not be able to expect existing legal requirements regarding their property to
remain entirely unchanged, today’s vague “expectation” places a notable burden on platform providers – heavy
enough, given their legitimate investment-backed expectations since 2002, to amount to a regulatory taking under
Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978).
112
Order, ¶ 144 (citing CWA Reply at 13-14, which cites to Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622
(1994) and Time Warner Entertainment, L.P. v. FCC, 93 F.3d 957 (D.C. Cir. 1996)).

28
monopolies about common carriers’ freedom of speech, particularly in the context of a
competitive marketplace. 113 Indeed, at least two sitting Justices have signaled a willingness to
wrestle with the implications of the issue of common carriers’ First Amendment protections.114

Similarly, the Order offhandedly rejects the analogies drawn to First Amendment
precedent concerning cable operators and broadcasters, based only on the unremarkable
observation that cable operators and broadcasters exercise a noteworthy degree of editorial
control over the content they transmit via their legacy services. 115 In so doing, the Order
disregards the fact that at least two federal district courts have concluded that broadband
providers, whether they originated as telephone companies or cable companies, have speech
rights. 116 Although the Order acknowledges the cases in today’s Order, it makes no effort to
distinguish or challenge them. Instead, the Order simply “disagree[s] with the reasoning of those
decisions.” 117

113
The Supreme Court has never directly addressed the First Amendment issues that would be associated with a
government compulsion to serve as a common carrier in a marketplace that offers consumers alternatives to a
monopoly provider. This is not surprising, for the courts have had no opportunity to pass on the issue; the FCC in
the modern era has found that it served the public interest to waive common carrier status on numerous occasions.
See, e.g., In re Australia-Japan Cable (Guam) Limited, 15 FCC Rcd. 24,057 (2000) (finding that the public interest
would be served by allowing a submarine cable operator to offer services on a non-common carrier basis because
AJC Guam was unable to exercise market power in light of ample alternative facilities); In re Tycom Networks Inc.,
et al., 15 FCC Rcd, 24,078 (2000) (examining the public interest prong of the NARUC I test, and determining that
TyCom US and TyCom Pacific lacked sufficient market power given the abundant alternative facilities present). In
fact, in the more than 85 reported cases in which the FCC has addressed common carrier waivers in the past 30
years, it has only imposed common carriage on an unwilling carrier once – and in that instance the agency later
reversed course and granted the requested non-common carrier status upon receiving the required information that
the applicant previously omitted. In re Applications of Martin Marietta Communications Systems, Inc.; For
Authority to Construct, Launch and Operate Space Stations in the Domestic Fixed-Satellite Service, 60 Rad. Reg. 2d
(P & F) 779 (1986).
114
The Order is flatly wrong in asserting that “no court has ever suggested that regulation of common carriage
arrangements triggers First Amendment scrutiny.” Order, ¶ 144 (emphasis added). In Midwest Video II, the Court
stated that the question of whether the imposition of common carriage would violate the First Amendment rights of
cable operators was “not frivolous.” 440 U.S. 689 (1979), 709 n.19. In DAETC, 518 U.S. 727 (1996), the plurality
opinion appeared split on, among other things, the constitutional validity of mandated leased access channels.
Justice Kennedy reasoned that mandating common carriage would be “functional[ly] equivalent[t]” to designating a
public forum and that both government acts therefore should be subject to the same level of First Amendment
scrutiny. Id. at 798 (Kennedy, J., concurring in part, concurring in the judgment in part, and dissenting in part).
Justice Thomas’ analysis went even further in questioning the old [dicta] about common carriers’ speech rights. See
id. at 824–26 (Thomas, J., concurring in the judgment in part and dissenting in part) (stating that “Common carriers
are private entities and may, consistent with the First Amendment, exercise editorial discretion in the absence of a
specific statutory prohibition”).
115
Order, ¶ 140 (citing, e.g., Turner Broadcast Systems, Inc v. FCC, 512 U.S. 622, 636 (1994) (Turner I)).
116
Illinois Bell Telephone Co. v. Village of Itasca, 503 F. Supp. 2d 928 (N.D. Ill. 2007) (analogizing broadband
network providers to cable and DBS providers); Comcast Cablevision of Broward County, Inc. v. Broward County,
124 F. Supp. 2d 685 (S.D. Fla. 2000) (relying on Supreme Court precedent in Ex parte Jackson, 96 U.S. 727, 733
(1878) and Lovell v. Griffin, 303 U.S. 444, 452 (1938), the court concluded that the message, as well as the
messenger, receives constitutional protection because the transmission function provided by broadband services
could not be separated from the content of the speech being transmitted).
117
Order, n. 458.

29
 Second, I question the Order’s breezy assertion that broadband ISPs perform no editorial
function worthy of constitutional recognition. The Order rests the weight of its argument here on
the fact that broadband ISPs voluntarily devote the vast majority of their capacity to uses by
independent speakers with very little editorial invention by the platform provider beyond
“network management practices designed to protect their Internet services against spam and
malicious content.” 118 But what are acts such as providing quality of service (QoS) management
and content filters if not editorial functions? 119

And the mere act of opening one’s platform to a large multiplicity of independent voices
does not divest the platform owner of its First Amendment rights. 120 The Order cites no legal
precedent for determining how much “editorial discretion” must be exercised before a speaker
can merit First Amendment protection. Newspapers provide other speakers access to their print
“platforms” in the form of classified and display advertising, letters to the editor, and, more
recently, reader comments posted in response to online news stories. Advertising historically has
filled 60 percent or more of the space in daily newspapers, 121 and publishers rarely turn away ads
in these difficult economic times 122 – though they still may exercise some minor degree of
“editorial discretion” to screen out “malicious” content deemed inappropriate for family
consumption. Under the Order’s rationale, would newspaper publishers therefore be deemed to
have relinquished rights to free speech protection?

Third, it is undisputed that broadband ISPs merit First Amendment protection when using
their own platforms to provide multichannel video programming services and similar offerings.
The Order acknowledges as much but simply asserts that the new regulations will leave
broadband ISPs sufficient room to speak in this fashion 123 – unless, of course, hints elsewhere in
the document concerning capacity usage come to pass. 124 So while the Order concedes, as it
118
Order, ¶ 143.
119
In addition, the Order’s citation to a Copyright Act provision, U.S.C. § 230(c)(1), to support the proposition that
broadband providers serve no editorial function, see Order, ¶ 142, ignores the fact that broadband ISPs engage in
editorial discretion – as permitted under another provision of the Copyright Act, 17 U.S.C. § 230(c)(2) – to block
malicious content and to restrict pornography. See Batzel v. Smith, 333 F.3d 1018, 1030 n.14 (9th Cir. 2003) (noting
that § 230(c)(2) “encourages good Samaritans by protecting service providers and users from liability for claims
arising out of the removal of potentially ‘objectionable’ material from their services.... This provision insulates
service providers from claims premised on the taking down of a customer’s posting such as breach of contract or
unfair business practices.”).
120
Nor does the availability of alternative venues for speech undercut the platform owner’s First Amendment rights
to be able to effectively use its own regulated platform for the speech it wishes to disseminate. See, e.g., Nat’l Cable
Television Ass’n v. FCC, 33 F.3d 66 (D.C. Cir. 1994).
121
See, e.g., McInnis & Associates, “The Basics of Selling Newspaper Advertising,” Newspaper Print and Online ad
Sales Training, at http://www.ads-on-line.com/samples/Your_Publication/chapterone2.html (visited 12/7/10). This
ratio has remained relatively constant for decades. See Robert L. Jones & Roy E. Carter Jr., “Some Procedures for
Estimating ‘News Hole’ in Content Analysis,” The Public Opinion Quarterly, Vol. 23, No. 3 (Autumn, 1959), pp.
399-403, pin cite to p. 400 (noting measurements of non-advertising newsholes as low as 30 percent, with an
average around 40 percent) (available at http://www.jstor.org/stable/2746391?seq=2) (visited 12/7/10).
122
Alan Mutter, “Robust ad recovery bypassed newspapers,” Reflections of a Newsosaur (Dec. 3, 2010) (available
at http://newsosaur.blogspot.com/) (visited 12/7/10).
123
Order, ¶¶ 145-46.
124
Order, ¶¶ 112-14.

30
must, that network management regulation could well be subject to heightened First Amendment
review, it disregards the most significant hurdle posed by even the intermediate scrutiny
standard. 125 The Order devotes all of its sparse discussion to the first prong of the intermediate
scrutiny test, the “substantial” government interest, 126 while wholly failing to address the second
and typically most difficult prong for the government to satisfy: demonstrating that the
regulatory means chosen does not “burden substantially more speech than is necessary.” 127 And
what is the burden here? One need look no further than the Order’s discussion of specialized
services to find it. It announces an “expectation” that network providers will limit their use of
their own capacity for speech in order to make room for others – an expectation that may rise to
the level of effectively requiring the platform provider to pay extra, in the form of capacity build-
outs, before exercising its own right to speak. 128 Such a vague expectation creates a chilling
effect of the type that courts are well placed to recognize. 129

Yet the Order makes no effort, as First Amendment precedent requires, to weigh this
burden against the putative benefit. 130 Instead, Broadband ISP speakers are left in the dark to
grope their way through this regulatory fog. Before speaking via their own broadband platforms,
they must either: (1) guess and hope that they have left enough capacity for third party speech,
or (2) go hat in hand to the government for pre-clearance of their speech plans.

Finally, it should be noted one of the underlying policy rationales for imposing Internet
network management regulations effectively turns the First Amendment on its head. The

125
Although the Order addresses only intermediate scrutiny, the potential for application of strict scrutiny should not
be disregarded completely. Although the Court in Turner I declined to apply strict scrutiny to the statutorily
mandated must-carry rules, the network management mandates established by today’s Order may be distinguishable.
For example, while rules governing the act of routing data packets might arguably be content neutral regulations,
application of the rules in the real world may effectively dictate antecedent speaker-based and content-based choices
about which data packets to carry and how best to present the speech that they embody.
125
American Library Ass’n v. Reno, 33 F.3d 78 (D.C. Cir. 1994).
126
Under First Amendment jurisprudence, it typically is not difficult for the government to convince a court that the
agency’s interest is important or substantial. See, e.g., Carey v. Brown, 447 U.S. 455, 464–65 (1980) (“even the
most legitimate goal may not be advanced in a constitutionally impermissible manner”); Simon & Schuster, Inc. v.
Members of the N.Y. State Crime Victims Bd., 502 U.S. 105 (1991) (finding that the state interest was compelling,
but the Son of Sam law was not narrowly tailored to advance that objective). But I question whether the Order will
survive even this prong of the test because the Commission lacks evidence of a real problem here to be solved. Two
examples plus some economic theorizing may be insufficient to demonstrate that the asserted harms to be addressed
are, in fact, real and systemic. See Century Communications Corp. v. FCC, 835 F.2d 292, 300 (D.C. Cir. 1987)
(suggesting that to establish a real harm the Commission has the burden of producing empirical evidence such as
studies or surveys). The Commission’s most recent Section 706 Report, which – over the dissent of Commissioner
Baker and me – reversed course on 11 years’ worth of consistent findings that advanced services are being deployed
on a timely basis, is no foundation on which this part of the argument can securely rest. See supra Section A.
127
Turner I, 512 U.S. at 662.
128
See Order, ¶ 114 (“We fully expect that broadband providers will increase capacity offered for broadband
Internet access service if they expand network capacity to accommodate specialized services. We would be
concerned if capacity for broadband Internet access service did not keep pace.”).
129
See Fox v. FCC, 613 F.3d 317 (2d Cir. 2010) (holding that the FCC’s indecency policy “violates the First
Amendment because it is unconstitutionally vague, creating a chilling effect”).
130
See, e.g., Order, ¶¶ 146-48.

31
Founders crafted the Bill of Rights, and the First Amendment in particular, to act as a bulwark
against state attempts to trample on the rights of individuals. (Given that they had just won a war
against government tyranny, they were wary of recreating the very ills that had sparked the
Revolution – and which so many new Americans had sacrificed much to overcome.) More than
200 years later, our daily challenges may be different but the constitutional principles remain the
same. The First Amendment begins with the phrase “Congress shall make no law” for a reason.
Its restraint on government power ensures that we continue to enjoy all of the vigorous discourse,
conversation and debate that we, along with the rest of the world, now think of as
quintessentially American.

Conclusion

For the foregoing reasons, I respectfully dissent.

32
 ATTACHMENT A

Letter of FCC Commissioner Robert M. McDowell to the Hon. Henry A.

Waxman, Chairman, Committee on Energy and Commerce, U.S. House of
Representatives (May 5, 2010)

33
 Office of Commissioner Robert M. McDowell
Federal Communications Commission
Washington, D.C. 20554

May 5, 2010

The Honorable Henry A. Waxman

Chairman
Committee on Energy and Commerce
United States House of Representatives
Washington, DC 20515

Dear Chairman Waxman:

Thank you for the opportunity to testify before you and your colleagues on the
Subcommittee on Communications, Technology and the Internet on March 25 regarding
the National Broadband Plan.1 As I testified at the hearing, the Commission has never
classified broadband Internet access services as "telecommunications services" under
Title II of the Communications Act. In support of that assertion, I respectfully submit to
you the instant summary of the history of the regulatory classification of broadband
Internet access services.

In the wake of the privatization of the Internet in 1994, Congress overwhelmingly

passed the landmark Telecommunications Act of 1996 (1996 Act) and President Clinton
signed it into law. Prior to this time, the Commission had never regulated "information
services" or "Internet access services" as common carriage under Title II. Instead, such
services were classified as "enhanced services" under Title I. To the extent that regulated
common carriers offered their own enhanced services, using their own transmission
facilities, the FCC required the underlying, local transmission component to be offered on
a common carrier basis.2 No provider of retail information services was ever required to
tariff such service. With the 1996 Act, Congress had the opportunity to reverse the
Commission and regulate information services, including Internet access services, as
traditional common carriers, but chose not to do so. Instead, Congress codified the
Commission's existing classification of "enhanced sevices" as "information services"
under Title I.

1
Oversight of the Federal Communications Commission: The National Broadband Plan: Hearing Before
the Subcomm. on Communications, Technology, and the Internet of the House Comm. on Energy and
Commerce, 111th Cong., 2d Sess. (March 25, 2010).
2
Some who are advocating that broadband Internet access service should be regulated under Title II cite to
the Commission's 1998 GTEADSL Order to support their assertion. See GTE Telephone Operating Cos.,
CC Docket No. 98-79, Memorandum Opinion and Order, 13 FCC Red. 22,466 (1998) {GTEADSL Order).
The GTE ADSL Order, however, is not on point, because in that order the Commission determined that
GTE-ADSL service was an interstate service for the purpose of resolving a tariff question.

34
 Two years after the 1996 Act was signed into law, Congress directed the
Commission to report on its interpretation of various parts of the statute, including the
definition of "information service."3 In response, on April 10,1998, under the Clinton-era
leadership of Chairman William Kennard, the Commission issued a Report to Congress
finding that "Internet access services are appropriately classed as information, rather than
telecommunications, services."4 The Commission reasoned as follows:

The provision of Internet access service ... offers end users information-
service capabilities inextricably intertwined with data transport. As such,
we conclude that it is appropriately classed as an "information service"5

In reaching this conclusion, the Commission reasoned that treating Internet access
services as telecommunications services would lead to "negative policy consequences."6

To be clear, the FCC consistently held that any provider of information services
could do so pursuant to Title I.7 No distinction was made in the way that retail providers of
Internet access service offered that information service to the public. The only distinction
of note was under the Commission's Computer Inquiry rules, which required common
carriers that were also providing information services to offer the transmission component
of the information service as a separate, tariffed telecommunications service. But again,
this requirement had no effect on the classification of retail Internet access service as an
information service.

In the meantime, during the waning days of the Clinton Administration in 2000,
the Commission initiated a Notice of Inquiry (NOI) to examine formalizing the
regulatory classification of cable modem services as information services.8 As a result of
the Cable Modem NOI, on March 14, 2002, the Commission issued a declaratory ruling

3
Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act,
1998, Pub. L. No. 105-119,111 Stat. 2440,2521-2522, § 623.
4
Federal-State Board on Universal Service, CC Docket No. 96-45, Report to Congress, 13 FCC Red.
11501, K 73 (1998) {Report to Congress).
5
Id. at 180 (emphasis added).
6
Id. at Tj 82 ("Our findings in this regard are reinforced by the negative policy consequences of a
conclusion that Internet access services should be classed as 'telecommunications.'").
7
As Seth P. Waxman, former Solicitor General under President Clinton, wrote in an April 28,2010 letter
to the Commission, "[t]he Commission has never classified any form of broadband Internet access as a
Title II 'telecommunications service* in whole or in part, and it has classified all forms of that retail service
as integrated 'information services' subject only to a light-touch regulatory approach under Title I. These
statutory determinations are one reason why the Clinton Administration rejected proposals to impose 'open
access' obligations on cable companies when they began providing broadband Internet access in the late
1990s, even though they then held a commanding share of the market. The Internet has thrived under this
approach." (Emphasis in the original.)
8
Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities, GN Docket No.
00-185, Notice of Inquiry, 15 FCC Red 19287 (2000) (Cable Modem NOI).

35
classifying cable modem service as an information service.9 In the Commission's Cable Modem
Declaratory Ruling, it pointed out that "[t]o date ... the Commission has declined to determine a
regulatory classification for, or to regulate, cable modem service on an industry-wide basis."10
Only one month earlier, on February 14, 2002, in its Notice of Proposed Rulemaking11 regarding
the classification of broadband Internet access services provided over wireline facilities, the
Commission underscored its view that information services integrated with telecommunications
services cannot simultaneously be deemed to contain a telecommunications service, even though
the combined offering has telecommunications components.

On June 27,2005, the Supreme Court upheld the Commission's determination that cable
modem services should be classified as information services.12 The Court, in upholding the
Commission's Cable Modem Order, explained the Commission's historical regulatory treatment
of "enhanced" or "information" services:

By contrast to basic service, the Commission decided not to subject providers of

enhanced service, even enhanced service offered via transmission wires, to Title
II common-carrier regulation. The Commission explained that it was unwise to
subject enhanced service to common-carrier regulation given the "fast-moving,
competitive market" in which they were offered.13

Subsequent to the Supreme Court upholding the Commission's classification of cable

modem service as an information service in its Brand Xdecision, the Commission without dissent
issued a series of orders classifying all broadband services as information services: wireline
(2005)14, powerline (2006)1* and wireless (2007).16 Consistent with

9
Inquiry Concerning High- Speed Access to the Internet Over Cable and Other Facilities;
Internet Over Cable Declaratory Ruling; Appropriate Regulatory Treatment for Broadband
Access to the Internet Over Cable Facilities, GN Docket No. 00-185, CS Docket No. 02-52,
Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Red 4798 (2002) (Cable Modem
Declaratory Ruling), aff'd, Nat'I. Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S.
967 (2005) (Brand X).
10
Id. at H 2.
11
Appropriate Framework for Broadband Access to the Internet over Wireline Facilities,
Universal Service Obligations of Broadband Providers, CC Docket No. 02-33, Notice of Proposed
Rulemaking, 17 FCC Red 3019 (2002) (Wireline Broadband NPRM).
12
Brand X, 545 U.S. 967.
13
Id. at 977 (emphasis added, internal citations to the Commission's Computer Inquiry II
decision omitted).
14 Appropriate Framework for Broadband Access to the Internet over Wireline Facilities;
Universal Service Obligations of Broadband Providers; Review of Regulatory Requirements for
Incumbent LEC Broadband Telecommunications Services; Computer III Further Remand
Proceedings: Bell Operating Company Provision of Enhanced Services; 1998 Biennial
Regulatory Review—Review of Computer III and ONA Safeguards and Requirements;
Conditional Petition of the Verizon Telephone Companies for Forbearance Under 47 U.S.C. §
I60(c)with Regard to Broadband Services Provided Via Fiber to the Premises; Petition of the
Verizon Telephone Companies for Declaratory Ruling or, Alternatively, for Interim Waiver with
Regard to Broadband Services Provided Via Fiber to the Premises; Consumer Protection in the
Broadband Era, CC Docket Nos. 02-33, 95-20, 98-10,01-337, WC Docket Nos. 04-242,

36
the Court's characterization, the Commission made these classifications to catch up to market
developments, to treat similar services alike and to provide certainty to those entities
provisioning broadband services, or contemplating doing so. Prior to these rulings, however,
such services were never classified as telecommunications services under Title II.

Again, I thank you for providing the opportunity to testify before your Committee and to
provide this analysis regarding the regulatory classification of broadband Internet access
services. I look forward to working with you and your colleagues as we continue to find ways
to encourage broadband deployment and adoption throughout our nation.

Sincerely,

Robert M. McDowell

cc: The Honorable Joe Barton

The Honorable Rick Boucher
The Honorable Cliff Steams

05-271, Report and Order and Notice of Proposed Rulemaking, 20 FCC Red 14853 (2005) {Wireline
Broadband Order), affd, Time Warner Telecom, Inc. v. FCC, 507 F.3d 205 (3d Cir. 2007).
1J
United Power Line Council's Petition for Declaratory Ruling Regarding the Classification of Broadband
over Power Line Internet Access Service as an Information Service, WC Docket No. 06-10, Memorandum
Opinion and Order, 21 FCC Red 13281 (2006).
16
Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, WT
Docket No. 07-53, Declaratory Ruling, 22 FCC Red 5901 (2007).